PETER MCCUTCHEON: On the remote outer islands of the Torres strait Queensland Health teams have been running clinics to treat the deadly and highly infectious disease tuberculosis.

Many of the patients here are Papua New Guinea nationals, suffering from MDR TB.

A nasty type of tuberculosis that is resistant to many conventional drugs.

DR JUSTIN WARING, NATIONAL TB ADVISORY COMMITTEE: It's in essence what it means is that the TB is far harder to treat, it takes a lot longer and is a lot more expensive to treat.

PETER MCCUTCHEON: For the past six years PNG citizens living near the border have been taking a short trip to Australia for life-saving TB treatment. But the Queensland and Commonwealth governments no longer want to fund a health service for foreign nationals and have decided to shut the program down. The move has deeply worried TB specialists.

DR JUSTIN WARING: Just completely stopping the treatment of these people is a dangerous prospect.

RUSSELL TROOD, QUEENSLAND SENATOR: There's a risk that Australians will be exposed to communicable diseases which they shouldn't be exposed to.

PETER MCCUTCHEON: Three years ago the '7:30 Report' accompanied a Cairns based TB outreach team during visits to islands, only kilometres from the PNG mainland. The specialist doctor and nurse spoke about the ethical and legal dilemmas they faced on the international border.

TONI FORD, NURSE: I can't turn my back on it. I mean some people might but we don't.

PETER MCCUTCHEON: Multi-drug resistant TB requires long term treatment, sometimes up to two years.

Queensland Health staff even issue petrol money to impoverished PNG visitors to help them return to the clinics. The argument for providing this service is twofold. First, for humanitarian reasons. The '7:30 Report' witnessed people crippled with TB begging for help. And second, it's a form of insurance to stop drug resistant tuberculosis from spreading to the Australian mainland..

DR JUSTIN WARING: If TB is poorly treated, for example if we didn't treat it in Australia, there's a risk of escalation. It's not just the individual who doesn't get better, it's transmission of worsening drug resistance and there is actually evidence that that's happening in the western province of PNG as well.

PETER MCCUTCHEON: Dr Justin Waring is chair of the national TB advisory committee. He's disturbed at reports confirmed by '7:30' that the Director General of Queensland Health directed doctors not to treat PNG nationals.

Is that practical?

DR JUSTIN WARING: I don't think it is. I've been told the same thing and the Queensland TB control program is not in favour of this. In fact, they've told me quite bluntly that they intend to do everything they can to continue to treat these people.

DOCTOR (to patient): You've been on three lots of tablets and the sachets, is that right?

PETER MCCUTCHEON: The Commonwealth and Queensland departments declined to speak on camera about the future of the Torres Strait TB clinic and the head of Queensland's TB control program said he was directed by his department not to speak to '7:30'. But in written statements, both departments say the decision to wind down the program by June 30 is financial.

"Queensland health has funded $4 million per annum for about $18 million worth for actual service provision. The Federal Department for Health and Ageing has advised Queensland Health to reduce services because it is unlikely to provide additional funds to cover the cost of full services."

PETER MCCUTCHEON: The Commonwealth Department also notes there are:

"Concerns about the increasing impact on access to health services being voiced by Torres Strait communities."

PETER MCCUTCHEON: These concerns were raised during a Senate inquiry last year. Giving evidence by video conference, Torres Strait leaders complained about PNG nationals exploiting a law that allows them to visit Australia for traditional purposes.

FRED GELA, MAYOR, TSI REGIONAL COUNCIL (June 2010): Stop the movement of people purely for health reasons. There are 13 western province communities now plus an additional 16 communities outside the treaty zone who access our health facilities.

RUSSELL TROOD: The reality is, Peter, that this is a very complicated geographic environment. People move back and forth across what is very porous border on a very regular basis. There are a large number of them, tens of thousands of movements a year.

PETER MCCUTCHEON: Liberal Senator Russell Trude chaired last year's Senate inquiry. He said the committee didn't recommend the shutting down of the TB clinic. On the contrary, it recommended the Commonwealth should consider giving more assistance to Queensland.

RUSSELL TROOD: The Queensland Government Health service, although I'm not a great fan of it in many ways, but the reality is that it's providing a service on behalf of the Commonwealth an it ought to be properly funded for it.

PETER MCCUTCHEON: There is general agreement that Papua New Guinea needs to do more to provide basic health services to the people of the western province and the 60 or so PNG nationals currently being treated by Queensland Health for tuberculosis will be referred to their local hospital. But Australian medical experts say realistically PNG won't be in a position to manage its own TB crisis for at least another decade.

DR JUSTIN WARING: In the short term, not treating these people that come across the water to Australia runs the risk of transition and escalation of the drug resistance and ultimately potentially putting Australian residence at risk.